The move will reunite Wade with team-mate Chris Bosh, who was wooed by the Houston Rockets among others but chose to stay with the Heat for a reported five-year deal worth $118 million.

By opting out of his prior contract, Wade gave the Heat more money to spend on talent to replace James but ensured greater salaries in future years.

"Dwyane has been the franchise cornerstone for this team since the day he arrived 11 years ago," Heat president Pat Riley said.

"He has shown his commitment to the Heat many times over the course of his career and has always been willing to sacrifice in order to help build this team into a champion.

"This time is no different. I am ecstatic to have him back in the fold and I am confident that Dwyane, as always, will be leading this team as we look to contend for NBA championships."

Filling the small forward spot vacated by four-time NBA Most Valuable Player James will be Britain's Luol Deng, the long-time Chicago Bulls playmaker who was traded to Cleveland in January and who became a free agent earlier this month.

Deng reportedly inked a two-year deal worth $20 million to join the Heat, who have also reportedly agreed terms with Mario Chalmers, Danny Granger, Chris Andersen and Josh McRoberts.

Wade, 32, struggled with knee injuries last season but averaged 19 points, 4.7 assists and 4.5 rebounds over 54 games, connecting on 55 percent of his shots, a career-best accuracy rate.

The Heat have reached the NBA Finals for the past four seasons since James joined the club in 2010, losing the 2011 and 2014 finals while winning crowns in 2012 and 2013.

Wade, who led the NBA in scoring in 2009, also joined retired star big man Shaquille O'Neal in winning an NBA title with the Heat in 2006.